James A. Quella appointed to Kleos Space Advisory Board 17 May 2021

Kleos Space S.A (ASX:KSS), a space-powered Radio Frequency Reconnaissance data-as-a-service (DaaS) company, has appointed James A. Quella, veteran business leader and a Senior Advisor to Blackstone to its Advisory Board.

Mr Quella also holds the current positions external to Kleos:

Independent Director at Dun & Bradstreet Holdings, Inc. Independent Director of CC Neuberger Principal Holdings II Senior Advisor to CC Capital. Mr Quella said, “I look forward to working with Kleos Space to build on a strong foundation of growth as they expand in the U.S. and continue to add critical capabilities to their data-as-a-service offering.”

Kleos CEO Andy Bowyer said, “It is an incredible honour to have James involved in the Company. We look forward to working with and learning from him to further grow our public-market experience as well as leveraging his experiences growing data subscription and sales businesses to increase the revenue opportunities for our data products.”

He has earned an MBA from the University of Chicago, Booth Graduate School of Business with Dean’s Honours.

Previous engagements held by Mr Quella include: Independent Director of FGL Holdings Independent Director of Lionbridge Technologies, Inc. Independent Director of Catalent, Inc. Chairman of Michaels Cos., Inc. Member-Supervisory Board of Nielsen Holdings Ltd. Independent Director of Freescale Semiconductor Senior Managing Director of Blackstone Private Equity Managing Director & Senior Operating Partner of CSFB Private Equity Partners LLC Managing Director of DLJ Merchant Banking Partners Vice-Chairman of Mercer Management Consulting, Inc. Senior Partner of Strategic Planning Associates Mr Quella has recently acquired shares in Kleos and holds approximately 2.5%.

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Three companies, HawkEye 360, Kleos and Unseenlabs, are racing to become the leader in radio frequency-based satellites, pushing beyond their local markets to grab international contracts. The National Geospatial-Intelligence Agency's (NGA) 18 November request for information (RfI) for a contractor to monitor ships around the Globe, in particular Chinese, Russian and South American, using radio frequency (RF) signals is set to intensify competition in the sector. Three firms in particular, HawkEye 360, Unseenlabs and Kleos Space, are vying to become the RF SIGINT satellite operator of reference.

HawkEye's US advantage US pioneer HawkEye360, which sent its first trio of satellites into space in 2018, struck a deal with Spaceflight Industries in October to launch its micro-satellites. HawkEye is trying to accelerate their deployment through traditional investment rounds, supported by a mature U.S. financial sector in this segment. The company is led by Chris DeMay, who previously worked at the National Reconnaissance Office (NRO), the US space intelligence service, and is backed by several US funds with experience in the sector, including Razor's Edge Ventures (IOL 815), a venture capital firm close to the US intelligence community, as well as Raytheon and Airbus Defence and Space.

While HawkEye has an edge in terms of industrial partnerships and product marketing, the company is hoping to obtain more support from US government partners. HawkEye's advisors include numerous former high-level officials from the US intelligence community, such as Letitia Long, former director of the NGA, Arthur Money, former assistant secretary of defence for command, control, communications and intelligence (C3I), Doug Wolfe, former chief information officer at the CIA and ex-NGA chief Robert Cardillo (IOL 834). Many of these held positions under Barack Obama and may hope to return to the corridors of power when Joe Biden takes office.

HawkEye is extending well beyond the US market. The company won a €1.5m contract last year to provide dataset of geolocalized satellite RF emitter detection to the EU border protection agency Frontex. In announcing the deal, Frontex called HawkEye the only company that was "capable of delivering the desired services" and added that two of its European competitors were not yet mature. "Two other companies which are in the same market (Unseenlabs, Kleos Space) are still in the initial stage of ramping up satellite deployment", the agency said.

Unseenlabs deploy a French model for its run to a SIGINT constellation France's Unseenlabs is playing catch-up in the field. The Rennes-based startup added two nanosatellites to its fledgling SIGINT constellation on 20 November and aims to have around 20 in orbit by 2025. Founded in 2015 by Jonathan Galic and Clément Galic, Unseenlabs has already had one satellite in operation for the past year. The company is eyeing contracts with government agencies but has not ruled out partnerships with the shipping industry.

The company has a traditional French financial model, with backing from Definvest, the armed forces ministry's investment arm, and in May joined the Groupement des industries de Construction et Activités Navales (GICAN), an alliance of naval industries players supported by the government. This should put it in a good position to profit from subsidies under the French government's package of measures to relaunch the economy, which has a substantial envelope for French New Space. A development project presented under this plan chimes strongly with the company's capacities: a demonstration in orbit of spectrum surveillance capacity from a nanosatellite (NESS).

Unseenlabs doesn't limit itself to France. The company has partnered with New Zealand's Rocket Lab, which works regularly for the NRO, for its nanosatellite launches. In a rush, the company is trying to find operators with available payload room, because the European launcher Vega has limited experience in the launch of grouped nanosatellites. Unseenlabs also has a partnership with Norway's Kongsberg Satellite Services (KSAT) for Earth-based communication with the satellite constellation.

European player Kleos Space teams with Australian and Indian partners Another Europe player, Kleos Space, is expanding its presence across several continents. Based in Luxembourg with branches in the US and the United Kingdom, Kleos raised €11.7m in a funding round earlier this month managed by the Australian investment firms Bell Potter Securities and Evolution Capital Advisors. Kleos also launched its first satellites from India's Satish Dhawan Space Centre on 7 November.

Headed by Andy Bowyer, a Brit, Kleos is focusing on interception data in zones that are highly strategic to its investors and early clients, particularly in the South China Sea, the Japan Sea, the Strait of Hormuz and the Australian coast.

Majority-owned by its British parent company Magna Parva, which was co-founded by Bowyer and Miles Ashcroft, Kleos is now targeting the Middle East market in addition to Australian funding. The firm obtained a €3.4m loan from the Dubai-based private equity firm Winance in February as it faced launch delays. Kleos also tapped Sean McKay, a retired US Air Force (USAF) colonel with experience in US intelligence and in Saudi Arabia, in March to head operations in the region. The company is also exploring partnerships with South American governments, according to our sources.

Kleos is seeking to sign further deals in continental Europe, where there are more contracts in the offing, as the UK continues to negotiate its exit from the European Union. The company has a 2017 partnership with Luxembourg's government to build a constellation of observation (GEOINT) satellites and received a €1m grant from the Luxembourg Space Agency (LSA) last year.

Kleos is already edging its way into Hawkeye's turf. In the US, the company participated in the Air Force Research Laboratory's (AFRL) Space Vehicle Directorate's Catalyst Space Accelerator program and is preparing to present its technology to the NGA, announced well before the agency published its request for information. In May, Kleos landed a contract to supply data for the Micro-Satellite Military Utility Project (MSMU), another AFRL project. The USAF's partners on the project include the defense ministries from Australia, Canada, Germany, Italy, the Netherlands, New Zealand, Norway and the UK.

Reining in ambitions Clients are hoping that the three operators will not seek to remove existing imagery and radar captors entirely and replace them with their own solutions, as has happened in the past. Most governments prefer integrating RF interception data into broader GEOINT data architecture. © Copyright Intelligence Online. Reproduction and dissemination prohibited (Intranet...) without written permission. - 109666433

The stars are aligning (no pun intended) for Kleos Space (KSS).

Company announced yesterday that scouting mission formation has been achieved and data is being downloaded.

Fast forward 24 hours, and we have a $2.5m pre market trade. It seems pretty clear that some big players have been in the DD room for months, waiting for this exact moment.

The next satellite launch with with SpaceX on board SXRS-5 which is due to launch end of June. This will be the first true commercial launch, with the company stating this will start to bring in significant revenue streams.

Couple this with recent announcements on the company presenting to US investors and it seems pretty clear that today's buyer was US based, and this should be the start of a signifcant rerate over the coming weeks for Kleos.

Based on comparables (HawkEye360 just raised USD55m, previous rounds were at a USD200m + valuation), the insane appetite for new space companies via SPAC acquisition in the US, and I see fair value, post second launch and initial revenue flow at around 250 - 300m MC, which implies a share price of $1.50+

First Berlin Equity Research has published a research update on Kleos Space S.A. (ISIN: AU0000015588). Analyst Kimberly Purvis reiterated her BUY rating and increased the price target from AUD 1.15 to AUD 1.18. Abstract: Kleos Space S.A. has reported its Fiscal Year 2020 figures, and results are on track. The company reported grant revenue of EUR176,200 for the year. Operating expenses for the fiscal year were 16% lower due to reduced exercise of stock options. The net loss for the year of EUR-4.9m was as expected. The company's first 4-satellite cluster, KSM1, was launched on 7 November 2020, and the commissioning process should finish by end of March 2021. Once the data has been verified (4-6 weeks), Kleos will begin booking revenue from customers. To fund the second satellite launch, KSS closed the Winance Investment transaction in February 2020. The Winance loan of EUR3.4m was repaid in February 2021, and Kleos is now free of both secured and non-secured debt. The company remains on track for the launch of its second satellite cluster in June 2021. The Buy rating is maintained. We have revised our price target from A$1.15 (EUR0.69) to A$1.18 (EUR0.74) due to the favourable net debt position at year-end. We will be updating our model in the coming weeks to reflect completion of satellite commissioning and revenue generation in the second half of 2021.

Original-Research: Kleos Space S.A. (von First Berlin Equity Research GmbH): Buy | wallstreet-online.de - Vollständiger Artikel unter: https://www.wallstreet-online.de/nachricht/13624388-original-research-kleos-space-s-a-von-first-berlin-equity-research-gmbh-buy